Namibia rental practice is pro-landlord

August 14, 2006

Namibia real estateRents: Can landlord and tenant freely agree rents in Namibia?

All terms of lease agreements can be freely negotiated between the parties. Issues such as the initial rent, the increase thereof during the lease term, can be freely agreed by the parties to the contract.

Deposits

The payment of deposits can be freely agreed. Deposits equal to one month’s rental are customary.

What rights do landlords and tenants have in Namibia, especially as to duration of contract, and eviction?

The initial period of lease and the extension thereof, use of the premises, breach, eviction, maintenance, insurance, etc., the duration of the contract, can be freely agreed between the parties. One year leases are customary, but leases are often either longer or shorter.

A fixed term contract simply runs out at the end of the tenure; after that, the lessee has no further right to occupy the property.

If no termination date has been established, a “reasonable” period of termination notice is required, which will be measured against the time it would normally take to re-let the property. Three months for residential properties would be acceptable unless there are specific circumstances which would render it unreasonable.

How effective is the Namibian legal system?

The common law is applied strictly as the basis of the interpretation of the agreement between the parties, which can be verbal, or in writing. Our Courts will not lightly interfere where the terms of a contract of lease are unambiguous, not contra bones mores (against good moral standards), or against public policy.

Namibia coastal propertiesThe process of getting legal redress can be cumbersome and time consuming, because the right of the other party to be heard(the audi alterem in partem rule) is a central pillar of our law. Where male fide defenses are raised solely to delay speedy adjudication, certain procedures can be implemented, but in landlord and tenant disputes our Courts almost always apply the audi alterem rule, because landlords, as in most other countries of the world, are notoriously harsh on their tenants and can afford expensive legal experts, while tenants can more often than not, not afford legal representation.

However the landlord has a very effective remedy in the Magistrate’s Court Act. The issuing of a summons in the Magistrate’s Court for arrears of rent causes an automatic rent interdict to apply to the tenant’s movables. Such movables cannot be removed from the property, until judgment by the Court in respect of the matter has been given.

Legislation

The Rents Ordinance No. 13/1977

The Value Added Tax Act 10 of 2000 determines that 15% of the rental amount is payable in tax, provided that the lessor is registered for tax, which he must be if he has a turnover of N$200 000 (US$25,500) or more per annum.

Brief History: Recent changes in Namibian landlord and tenant law

Up to 1990/1991, the relationship between landlord and tenant was more or less regulated by the Rents Ordinance No. 13/1977, which provided inter alia for the establishment of Rent Boards. These strictly regulated the relationship between landlord and tenant and were empowered to investigate any complaint, and to consider any application for the increase / decrease of rent by any lessor or lessee who had the choice to be represented by an advocate, lawyer or other representative. The Ordinance applied to all lease agreements, whether to business premises or to dwellings.

Namibia SwakopmundThe Ordinance however provided in Article 35 thereof that theThe Ordinance however provided in Article 35 thereof that the provisions thereof would not apply to any dwelling situated in an area for which no Rent Board has been established. After 1990/1991, all Rent Boards ceased to function.

Consequently, the Rents Ordinance has lost its artillery (namely the Rent Boards) and now has very little firing power. The Ordinance still exists, but is only applicable to business premises. The Common Law, which allows full freedom of contract, is the basis for Landlord and Tenant relations.

     

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